DCIT, New Delhi v. M/s. ADI BPO Services Ltd., New Delhi

ITA 980/DEL/2016 | 2012-2013
Pronouncement Date: 14-11-2017 | Result: Dismissed

Appeal Details

RSA Number 98020114 RSA 2016
Assessee PAN AAFCA7116B
Bench Delhi
Appeal Number ITA 980/DEL/2016
Duration Of Justice 1 year(s) 8 month(s) 19 day(s)
Appellant DCIT, New Delhi
Respondent M/s. ADI BPO Services Ltd., New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 14-11-2017
Appeal Filed By Department
Tags No record found
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 16-11-2017
Assessment Year 2012-2013
Appeal Filed On 25-02-2016
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B NEW DELHI BEFORE SH. BHAVNESH SAINI JUDICIAL MEMBER AND SH. L. P. SAHU ACCOUNTANT MEMBER ITA NO. 980/DEL/2016 (ASSESSMENT YEAR: 2012-13) DEPARTMENT BY : SH. ANIL KR. SHARMA SR. DR ASSESSEE BY : NONE. DATE OF HEARING : 14.11.2017 DATE OF PRONOUNCEMENT : 16.11.2017 O R D E R PER BHAVNESH SAINI J.M : 1. THIS APPEAL BY REVENUE HAS BEEN DIRECTED AGAINST T HE ORDER OF LD. CIT(A)I NEW DELHI DATED 29.12.2015 FOR ASSES SMENT YEAR 2012-13 CHALLENGING THE DELETION OF ADDITION OF RS. 5.35 CRORES MADE ON ACCOUNT OF DEEMED DIVIDEND U/S 2(22)(E) OF THE IT ACT. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS IT WAS OBSERVED BY THE AO THAT ASSESSEE COMPANY HAS TAKEN LOAN FROM M/S ADI MEDIA (P) LTD. AS UNDER: DCIT CIRCLE 1(2) ROOM NO. 368 C. R. BUILDING IP ESTATE NEW DELHI VS. ADI BPO SERVICES LTD. N-49 GREATER KAILASH-I NEW DELHI GIR/PAN: AAFCA7116B (APPELLANT) (RESPONDENT) SI. NO. NAME OPENING BALANCE ADDITION TO LOAN REPAYMENT OF LOAN RATE OF INTEREST GROSS INTEREST ACCRUED CLOSING BALANCE 1 ADI MEDIA PVT. LTD. - 3 00 00 000 - 12% 16 81 967 3 00 00 000 2 ADI MEDIA PVT. LTD. - 5 43 00 000 80 00 000 13.75% 21 78 172 4 63 00 000 TOTAL 8 43 00 000 80 00 000 38 60 139 7 63 00 000 2 ITA NO. 980/DEL/2016 3. IT WAS ALSO OBSERVED BY THE AO THAT M/S ADI MEDIA (P) LTD. IS HOLDING 8.43% SHARES OF THE ASSESSEE COMPANY. THE A SSESSEE WAS ASKED TO FURNISH DETAILS OF SHAREHOLDING OF M/S ADI MEDIA (P) LTD. WHICH IS REPRODUCED IN THE ORDERS OF AUTHORITY BELO W SHOWING SHAREHOLDINGS OF M/S ADI MEDIA (P) LTD OF 8.43%. IT WAS FURTHER OBSERVED BY THE AO THAT SH. NISHITH ARORA IS HOLDIN G 90.72% SHARES OF THE ASSESSEE COMPANY AND ALSO ALSO OWNS 5 0% SHARES OF M/S ADI MEDIA (P) LTD. FROM WHOM THE ASSESSEE COMPA NY HAD TAKEN LOAN UNDER YEAR CONSIDERATION. IT WAS ALSO OB SERVED BY THE AO THAT M/S ADI MEDIA (P) LTD HAS ACCUMULATED PROFI T AS ON 31.03.2012 OF RS. 5 35 60 758/-. IT WAS OBSERVED TH AT M/S ADI MEDIA (P) LTD. EVEN THOUGH HAVING SURPLUS PROFIT/R ESERVE HAS NOT DECLARED ANY DIVIDEND TO ITS SHAREHOLDER. CONSIDERI NG THE FACTS THE ASSESSEE COMPANY HAS TAKEN LOAN FROM M/S ADI MEDIA (P) LTD. WHICH IS CONTROLLED BY SH. NISHITH ARORA AND ANJU A RORA WHO TOGETHER HOLDS 91.57% SHARES AND ALSO HAVING CONTRO L OVER M/S ADI MEDIA (P) LTD. BY VIRTUE OF HOLDING OF 50% SHA RES (EACH) WHO IS ALSO SHAREHOLDERS OF 8.43% SHARES OF THE ASSESSEE C OMPANY THE AO ASKED THE ASSESSEE TO EXPLAIN WHY PROVISIONS OF SECTION 2(22)(E) OF THE IT ACT MAY NOT BE APPLICABLE IN THE CASE OF ASSESSEE FOR HAVING ACCEPTED THE LOAN FROM M/S ADI MEDIA (P) LTD . THE ASSESSEE EXPLAINED BEFORE AO THAT ASSESSMENT OF ICD IS NOT C OVERED IN THE PREVIEW OF SECTION 2(22)(E) OF THE IT ACT. THE ASSE SSEE HAS ALSO EXPLAINED THE DIFFERENCE BETWEEN LOAN AND DEPOSIT I N THE SUBMISSIONS AND CITED VARIOUS CASE LAWS IN THIS REG ARD. THE ASSESSEE ALSO SUBMITTED THAT THE AMOUNT OF LENT BY M/S ADI MEDIA (P) LTD TO ADI BPO (P) LTD. IS AN INCORPORATE DEPO SIT ON A FIX RATE OF INTEREST THEREFORE SECTION 2(22)(E) WILL NOT BE A PPLICABLE. THE AO HOWEVER REJECTED THE CONTENTION OF ASSESSEE AND AD DED RS. 5.35 3 ITA NO. 980/DEL/2016 CRORES TO THE EXTENT OF ACCUMULATED PROFIT AVAILABL E IN THE HANDS OF M/S ADI MEDIA (P) LTD AS DEEMED DIVIDEND. 4. THE ASSESSEE CHALLENGED THE ADDITION BEFORE LD. CI T(A) AND SUBMISSION OF THE ASSESSEE IS REPRODUCED IN THE IMP UGNED ORDER IN WHICH THE ASSESSEE BRIEFLY EXPLAINED THAT M/S ADI M EDIA (P) LTD HAD GIVEN INCORPORATED DEPOSIT SUBJECT TO INTEREST COPIES OF BOARD RESOLUTION WERE FILED. IT WAS EXPLAINED THAT IT WAS NEITHER LOAN NOR ADVANCE IT WAS A TRANSACTION IN THE ORDINARY COURS E OF BUSINESS WOULD BE OUTSIDE THE PREVIEW OF THE SECTION 2(22)(E ) OF THE IT ACT. THE ASSESSEE PRODUCED RELEVANT DOCUMENTS BEFORE LD. CIT(A) IN SUPPORT OF ABOVE CONTENTIONS. 5. LD. CIT(A) CONSIDERING THE SUBMISSIONS OF THE ASSE SSEE IN THE LIGHT OF THE MATTER ON RECORD DELETED THE ADDITION BY HOLDING PROVISIONS OF SECTION 2(22)(E) WOULD NOT APPLY IN T HE CASE OF THE ASSESSEE. HIS FINDINGS IN THE IMPUGED ORDER ARE REP RODUCED AS UNDER: I HAVE CAREFULLY GONE THROUGH THE SUBMISSIONS OF TH E AR ON THE ASPECT OF DEPOSIT. THE AR PLACED RELIANCE ON NUMEROUS JUDICIA L PRONOUNCEMENTS TO EXPLAIN THE CHARACTERISTICS OF A DEPOSIT. AS LAI D DOWN BY VARIOUS COURTS THE CHARACTERISTICS OF A DEPOSIT INTER-ALI A INCLUDE THE FOLLOWING: (A) THE TERM DEPOSIT IS AN ACT OF GIVING MONEY OR OTHE R PROPERTY TO ANOTHER WHO PROMISES TO PRESERVE IT OR USE IT AND RETURN IT IN KIND. (B) THE DEPOSITOR GOES TO THE DEPOSITEE FOR INVESTING HIS MONEY PRIMARILY WITH THE INTENTION OF EARNING INTEREST. (C) THE OBLIGATION TO REPAY THE DEPOSIT DEPENDS ON THE MATURITY PERIOD FIXED OR THE TERMS OF THE AGREEMENT RELATING TO THE DEMAN D. (D) A DEPOSIT DOES NOT IMPOSE AN IMMEDIATE OBLIGATION ON THE DEPOSITEE TO SEEK OUT THE DEPOSITOR AND REPAY HIM. HE IS TO KEEP THE MONEY TILL ASKED FOR IT. (E) IN THE CASE OF A DEPOSIT IT IS THE DUTY OF THE DEP OSITOR TO GO TO THE BANKER OR THE PERSON WITH WHOM THE MONEY HAS BEEN DEPOSITE D AS THE CASE MAY BE AND MAKE A DEMAND FOR THE REPAYMENT OF THE SAME . (F) THE PROCESS OF ACCEPTING AND GIVING ICDS IS A MEANS OF ALTERNATIVE FINANCING AND CANNOT BE TREATED AS LOAN OR ADVANCE. (G) THE TERM DEPOSIT AND LOAN MAY NOT BE MUTUALLY EXCL USIVE BUT IN EACH CASE THE INTENTION OF THE PARTIES AND THE CIRCUMST ANCES MUST BE CONSIDERED. 4 ITA NO. 980/DEL/2016 THE AR OF THE APPELLANT EXPLAINED THE CHARACTERISTI CS OF DEPOSIT BEFORE ME. IT IS SEEN THAT THESE CHARACTERISTICS AR E APPLICABLE IN THE CASE OF THE APPELLANT. THE AMOUNT ADVANCED BY ADI MEDIA PVT. LTD. TO THE APPELLANT IS FOR BUSINESS EXPANSION FOR MEETING TH E SHORT TERM REQUIREMENT OF INVESTING IN SHARES OF MPS LIMITED. THE SAID AMOUNT CARRIES A FIXED RATE OF INTEREST AND THE APPELLANT HAS PAID SUCH INTEREST TO M/S ADI MEDIA PVT. LTD. WHICH HAS ALSO BEEN SUO MO TO DISALLOWED BY THE APPELLANT UNDER SECTION 14A OF THE ACT. THE MINUTES OF A MEETING MERELY SUMMARIZE THE DISCU SSIONS WHICH TAKE PLACE IN A BOARD MEETING. NO DOUBT THE MINUTES STATE THAT ADI MEDIA PVT. LTD. SHALL PROVIDE ICD TO THE APPELL ANT OUT OF SURPLUS FUNDS HOWEVER IT EVEN STATES THAT THE FUNDS MAY B E BORROWED FROM EXTERNAL AGENCIES AND IF THAT BE THE CASE THEN THE RATE OF INTEREST SHALL BE 0.5% HIGHER THAT THE INTEREST ON LOANS AVAILED. THE FACTS OF THE APPELLANT PROVE THAT THE DEPOSIT PLACED WITH THE AP PELLANT WERE AT A RATE OF INTEREST WHICH WAS 0.5% HIGHER THAN THE INTEREST PAID ON LOANS TAKEN BY M/S ADI MEDIA PVT. LTD. FROM EXTERNAL AGENCIES. THE AO HAS IGNORED THE AFORESAID FACTS FROM THE MINUTES OF THE MEETING AND HAS MERELY DONE CHERRY-PICKING OF THE WORDS. FURTHER ON PERUSAL OF THE MINUTES IT IS CLEAR THAT THE BOARD OF M/S ADI MEDIA PVT. LTD. REV IEWED THE REQUIREMENT OF FUNDS OF THE APPELLANT. REVIEW OF A REQUIREMENT CAN ONLY HAPPEN IF A REQUEST IS PLACED AND NOT WITHOUT A REQ UEST. ACCORDINGLY I AM OF THE CONSIDERATE VIEW THAT THE AMOUNT ADVANCED BY M/S ADI MEDIA PVT. LTD. TO THE APPELLAN T WAS IN THE NATURE OF ICD WHICH WAS PURELY A BUSINESS TRANSACTION. IT WAS NEITHER A LOAN NOR AN ADVANCE AND THEREFORE THE PROVISIONS OF SEC TION 2(22)(E) OF THE ACT ARE NOT ATTRACTED. THE AO IN HIS ORDER HAS FURTHER STATED THAT THE AMO UNT PLACED AS DEPOSIT BY M/S ADI MEDIA PVT. LTD. WITH THE APPELLA NT WAS NOT OUT OF BORROWED FUNDS BUT OUT OF ACCUMULATED PROFIT. IT WA S SUBMITTED BY THE APPELLANT THAT M/S ADI MEDIA PVT. LTD. HAD TAKEN A LOAN OF RS. 7.8 CRORES FROM FINANCIAL INSTITUTIONS. THE DEPOSIT PLACED WITH THE APPELLANT IS RS. 8.03 CRORES (AND NOT RS. 8.43 CRORES AS NOTED BY TH E AO) WHICH IS ALMOST THE SAME AS THE TOTAL LOAN TAKEN BY ADI MEDIA PVT. LTD. FROM EXTERNAL AGENCIES. (THE EXCESS RS. 0.23 CRORES IS OUT OF SUR PLUS FUNDS OF ADI MEDIA PVT. LTD.). IT IS NOT UNDER DOUBT THAT ADI ME DIA HAD SUFFICIENT ACCUMULATED BALANCE HOWEVER THAT BY ITSELF CANNOT GIVE RISE TO AN INTERPRETATION THAT THE ENTIRE DEPOSIT PLACED BY AD I MEDIA PVT. LTD. WAS OUT OF ITS SURPLUS FUNDS MORE SO WHEN THE FLOW OF FUNDS WAS SUCH THAT THE LOAN TAKEN BY ADI MEDIA PVT. LTD. CAN BE LINKED WIT H THE CORRESPONDING DEPOSIT PLACED WITH THE APPELLANT. HOWEVER AS ALRE ADY OBSERVED IN THE PRECEDING PARAGRAPHS SINCE THE NATURE OF THE TRANSACTION IS OF ICD ON A FIXED RATE OF INTEREST IT DOES NOT MAKE ANY DIFFER ENCE WHETHER IT IS OUT OF OWN FUNDS OR BORROWED FUNDS THE SAME IS NOT COV ERED WITHIN THE AMBIT OF DEEMED DIVIDEND. 5 ITA NO. 980/DEL/2016 THE AR FURTHER PLACED RELIANCE ON THE DECISION OF DELHI HIGH COURT IN THE CASE OF CIT V. ANKITECH (P) LTD. [2012 ] 340 ITR 14. THIS DECISION BEING THE DECISION OF THE JURISDICTIONAL HIGH COURT IS OF PARAMOUNT IMPORTANCE. I HAVE GONE THROUGH THE FACTS OF THIS DECISION IN DETAIL AND THE SAME IS SUMMARIZED WITH REFERENCE TO THE APPELLANTS CASE. (A) THE FACTS IN THE CASE OF THE APPELLANT ARE SIMILAR TO THE DECISION OF THE HONBLE COURT IN ANKITECH (P) LTD. WHEREIN T HE ASSESSEE COMPANY (APL) RECEIVED ADVANCE FROM JAKSON GENERATO RS (P) LTD. (JGPL). THE AO TREATED THE ADVANCE AS DEEMED DIVIDE ND IN THE HANDS OF APL. BECAUSE 2 SHAREHOLDERS WERE HOLDING SUBSTANTI AL INTEREST IN BOTH THE COMPANIES. APL WAS NOT A SHAREHOLDER OF JGPL. (B) IT WAS HELD THAT A DIVIDEND CANNOT BE TAXED IN THE HANDS OF A NON-SHAREHOLDER. SINCE IN THE INSTANT CASE OF THE APPELLANT ADI BPO SERVICES LTD. (THE APPELLANT) IS NOT A SHAREHOLDER OF ADI MEDIA PVT. LTD. THEREFORE THE AMOUNT ADVANCED TO THE APPELLANT BY A DI MEDIA PVT. LTD. CANNOT BE BROUGHT TO TAX IN THE HANDS OF THE A PPELLANT. (C) THE COURT HELD THAT THE DEEMING FICTION OF SECTION 2(22)(E) OF THE ACT IS ONLY TO TAX THE AMOUNT IN THE HANDS OF THE SHARE HOLDER AND NOT A PERSON OTHER THAN THE SHAREHOLDER AS THIS WAS NEVER THE IN TENT OF THE LEGISLATURE. IT IS NECESSARY TO QUOTE THE RELEVANT PARAS FROM THE ORDE R OF THE HONBLE COURT: '25 FURTHER IT IS AN ADMITTED CASE THAT UNDER NORM AL CIRCUMSTANCES SUCH A LOAN OR ADVANCE GIVEN TO THE SHAREHOLDERS OR TO A CONCERN WOULD NOT QUALIFY AS DIVIDEND. IT HAS BEEN MADE SO BY LEG AL FICTION CREATED UNDER SECTION 2(22)(E) OF THE ACT. WE HAVE TO KEEP IN MIND THAT THIS LEGAL PROVISION RELATES TO 'DIVIDEND'. THUS BY A DEEMING PROVISION IT IS THE DEFINITION OF DIVIDEND WHICH IS ENLARGED. LEGAL FIC TION DOES NOT EXTEND TO 'SHAREHOLDER'. WHEN WE KEEP IN MIND THIS ASPECT TH E CONCLUSION WOULD BE OBVIOUS VIZ. LOAN OR ADVANCE GIVEN UNDER THE C ONDITIONS SPECIFIED UNDER SECTION 2(22)(E) OF THE ACT WOULD ALSO BE TRE ATED AS DIVIDEND. THE FICTION HAS TO STOP HERE AND IS NOT TO BE EXTENDED FURTHER FOR BROADENING THE CONCEPT OF SHAREHOLDERS BY WAY OF LEGAL FICTION . IT IS A COMMON CASE THAT ANY COMPANY IS SUPPOSED TO DISTRIBUTE THE PROF ITS IN THE FORM OF DIVIDEND TO ITS SHAREHOLDERS/MEMBERS AND SUCH DIVID END CANNOT BE GIVEN TO NON-MEMBERS. THE SECOND CATEGORY SPECIFIED UNDER SECTION 2(22)(E) OF THE ACT VIZ. A CONCERN (LIKE THE ASSESSEE HERE IN) WHICH IS GIVEN THE LOAN OR ADVANCE IS ADMITTEDLY NOT A SHAREHOLDER/MEM BER OF THE PAYER COMPANY. THEREFORE UNDER NO CIRCUMSTANCE IT COULD BE TREATED AS SHAREHOLDER/MEMBER RECEIVING DIVIDEND. IF THE INTEN TION OF THE LEGISLATURE WAS TO TAX SUCH LOAN OR ADVANCE AS DEEM ED DIVIDEND AT THE HANDS OF 'DEEMING SHAREHOLDER' THEN THE LEGISLATUR E WOULD HAVE INSERTED DEEMING PROVISION IN RESPECT OF SHAREHOLDE R AS WELL THAT HAS NOT HAPPENED. MOST OF THE ARGUMENTS OF THE LEARNED COUNSELS FOR THE REVENUE WOULD STAND ANSWERED ONCE WE LOOK INTO THE MATTER FROM THIS PERSPECTIVE. 6 ITA NO. 980/DEL/2016 26 IN A CASE LIKE THIS THE RECIPIENT WOULD BE A SH AREHOLDER BY WAY OF DEEMING PROVISION. IT IS NOT CORRECT ON THE PART OF THE REVENUE TO ARGUE THAT IF THIS POSITION IS TAKEN THEN THE INCOME 'IS NOT TAXED AT THE HANDS OF THE RECIPIENT'. SUCH AN ARGUMENT BASED ON THE SCHEM E OF THE ACT AS PROJECTED BY THE LEARNED COUNSELS FOR THE REVENUE O N THE BASIS OF SECTIONS 4 5 8 14 AND 56 OF THE ACT WOULD BE OF NO AVAIL. SIMPLE ANSWER TO THIS ARGUMENT IS THAT SUCH LOAN OR ADVANC E IN THE FIRST PLACE IS NOT AN INCOME. SUCH A LOAN OR ADVANCE HAS TO BE RETURNED BY THE RECIPIENT TO THE COMPANY WHICH HAS GIVEN THE LOAN OR ADVANCE.' (D) THE CONCEPT OF DEEMED DIVIDEND WAS TO TAX A SHA REHOLDER WHO WAS GETTING DIRECT/ INDIRECT BENEFIT FROM THE COMPA NY WHICH ADVANCES ITS ACCUMULATED PROFITS TOSUCH A SHAREHOLDER IN THE FO RM OF LOANS AND ESCAPES FROM THE LIABILITY OF DIVIDEND DISTRIBUTION TAX (DDT). SUCH INTENT IS ABSENT IN THE CASE OF THE APPELLANT AS NO LOAN/ ADVANCE HAS BEEN GIVEN TO THE COMMON SHAREHOLDER OF THE APPELLANT I. E. M/S ADI MEDIA PVT. LTD. AND MR. NISHITH ARORA. HENCE IT CANNOT BE SAID THAT DIRECTLY/INDIRECTLY SOME BENEFIT IS BEING GIVEN TO THE SHAREHOLDERS. AS ALREADY OBSERVED IN THE PRECEDING PARAGRAPHS TH E AMOUNT ADVANCED BY ADI MEDIA PVT. LTD. TO THE APPELLANT IS IN THE NATURE OF ICD WHICH IS OUTSIDE THE PURVIEW OF SECTION 2(22)(E) OF THE ACT. RESPECTFULLY FOLLOWING THE DECISION OF THE JURISDICTIONAL DELHI HIGH COURT IN THE CASE OF ANKITECH (P) LTD. (SUPRA) I AM OF THE CONSIDERA TE VIEW THAT THE ADDITION MADE ON ACCOUNT OF DEEMED DIVIDEND IN THE HANDS OF THE APPELLANT IS UNWARRANTED AND DESERVES TO BE DELETED MORE SO WHEN THE APPELLANT IS NOT EVEN A SHAREHOLDER OF M/S ADI MEDI A PVT. LTD. IT IS ALSO WORTH MENTIONING HERE THAT M/S ADI MEDIA PVT. LTD. THOUGH BEING A SHAREHOLDER OF THE APPELLANT HOLDS ONLY 8.43% SHARES OF THE APPELLANT I.E. LESS THAN 10% SHARE IN THE VOT ING POWER OF THE APPELLANT AND THEREFORE THE PROVISIONS OF SECTION 2(22)(E) OF THE ACT ARE NOT APPLICABLE HER 6. AFTER CONSIDERING THE SUBMISSION OF THE LD. DR WE ARE OF THE VIEW NO INTERFERENCE IS CALLED FOR IN THE MATTER. 7. LD. CIT (A) FOUND THAT THE AMOUNT ADVANCE BY M/S A DI MEDIA (P) LTD TO THE ASSESSEE COMPANY IS FOR BUSINESS EXP ANSION FOR MEETING THE SHORT TERM REQUIREMENTS FOR INVESTING I N SHARES OF NPS LTD. THE SAID AMOUNT CARRIES A FIXED RATE OF INTERE ST AND ASSESSEE PAID SUCH INTEREST TO M/S ADI MEDIA (P) LTD. 8. LD. CIT(A) CONSIDERING THE MINUTEST OF A MEETING A ND OTHER MATERIAL ON RECORD FOUND THAT THE AMOUNT ADVANCE BY M/S ADI MEDIA (P) LTD TO THE ASSESSEE WAS IN NATURE OF ICD WHICH WAS 7 ITA NO. 980/DEL/2016 PURELY BUSINESS TRANSACTION. LD. CIT(A) ALSO ON GOI NG THROUGH THE DETAILS FOUND THAT M/S ADI MEDIA (P) LTD THOUGH BEI NG SHAREHOLDERS OF THE ASSESSEE HOLDS ONLY 8.43% SHAR ES OF THE ASSESSEE COMPANY I.E. LESS THAN 10% FOR VOTING POWE R OF THE ASSESSEE COMPANY AND THEREFORE PROVISIONS OF SECTI ON 2(22)(E) OF THE IT ACT ARE NOT APPLICABLE TO THE CASE OF THE AS SESSEE. THUS SPECIFIC FINDINGS OF THE FACTS RECORDED BY LD. CIT( A) BASED ON MATERIAL ON RECORD HAVE NOT BEEN REBUTTED BY THE RE VENUE DEPARTMENT THROUGH ANY EVIDENCE OR MATERIAL ON RECO RD. IN THE ABSENCE OF ANY EVIDENCE OR MATERIAL ON RECORD AGAIN ST THE ASSESSEE THE FINDINGS OF FACT RECORDED BY CIT(A) THAT TRANSA CTION BETWEEN ASSESSEE COMPANY AND M/S ADI MEDIA (P) LTD IS A BUS INESS TRANSACTION AND THAT M/S ADI MEDIA (P) LTD HOLDS ON LY 8.43% SHARES OF THE ASSESSEE I.E. LESS THAN 10% SHARE IN THE VOTING POWER OF THE ASSESSEE COMPANY CLEARLY SUPPORT THE FINDING S OF THE CIT(A) THAT PROVISIONS OF SECTION 2(22)(E) OF THE IT ACT A RE NOT APPLICATION IN THE PRESENT CASE OF THE ASSESSEE. NO INFIRMITY H AVE BEEN POINTED OUT IN THE ORDER OF THE CIT(A) IN DELETING THE ADDI TION. 9. WE MAY REFER TO RECENT BOARD CIRCULAR F NO. 279/MISC./140/2015/ITJ CIRCULAR NO. 19/17 DATED 1 2.06.2017 IN WHICH THE BOARD CLARIFIED THE SETTLED VIEW ON SE CTION 2(22)(E) OF THE IT ACT TRADE ADVANCES AND IN PARA 3 IT IS DIRE CTED IN VIEW OF THE ABOVE IT IS A SETTLED POSITION THAT TRADE ADVAN CES WHICH ARE IN THE NATURE OF COMMERCIAL TRANSACTION WOULD NOT FALL WITHIN THE AMBIT OF THE WORD ADVANCE IN THE SECTION 2(22)(E) OF THE IT ACT. ACCORDINGLY HENCEFORTH APPEALS MAY NOT BE FILED O N THIS GROUND BY OFFICERS OF THE DEPARTMENT AND THOSE ALREADY FIL ED IN THE COURTS/TRIBUNALS MAY BE WITHDRAWN/NOT PRESSED UPON. 8 ITA NO. 980/DEL/2016 10. IN VIEW OF THE ABOVE DISCUSSIONS IN THE LIGHT OF T HE FINDINGS OF THE LD. CIT(A) AND ABOVE BOARD CIRCULAR WE ARE OF THE VIEW NO INTERFERENCE IS CALLED FOR IN THE MATTER. THE DEPAR TMENTAL APPEAL THEREFORE STAND DISMISSED. IN THE RESULT APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 16.11.2017. SD/- SD/- (L. P. SAHU) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATE: 16.11.2017 @M!T